Assuming that we leave the European Union at some point this year, British farming faces a very uncertain future. Direct payments will be phased out over a period of time ending in 2027, from which point farmers will have only the market price for their produce. Those who choose to do so will receive grants for environmental protection and enhancement and there will probably be a new grant scheme to encourage innovation.
That loss of the Basic Payment will cause seismic restructuring. The average farm business in England in 2015/16 made a loss of £27,044 on farming activities, offset by income from agri-environment schemes of £5,359, from farm diversification of £9,020 and from the Basic Payment of £21,145. Without the last, the average farm in England is not economically viable unless radical action is taken to improve productivity and profitability.
Whilst making farming activities more profitable must be a priority, finding alternative sources of income is essential. Most farms have a broad range of assets, including buildings, some of which may be redundant, woodland and farmland of marginal value. All assets must be exploited to create a diverse range of enterprises to make the farm more resilient and profitable. But most diversification project will require planning consent.
Despite the efforts of Government over the past decade, the planning system has become more bureaucratic, expensive and protracted. Indeed, the constant tinkering with Permitted Development Rights is a tacit admission that the planning system is not fit for purpose. Why would there be any need to circumvent the process by means of Permitted Development without planning consent if the process was efficient, timely and cost effective?
Of course, the environment must be protected but the process must be proportionate and flexible. A recent application for conversion of a 25 year old log cabin to residential use was held up by the need to have assessments on the presence of asbestos, bats, newts and any nearby trees. Consultants were hired to prepare written reports to be paid for by the applicant. Biodiversity offsetting, a process by which suitable and enhanced habitat for any wildlife displaced by development is provided nearby, was proposed some years ago but it still relatively rarely used.
Permitted Development Rights may allow the conversion of farm buildings for housing in certain circumstances but this does not apply in a designated landscape such as a National Park or Area of Outstanding Natural Beauty. The finding in the Hibbitt case of 2016 found that the work done on a modern farm building to convert for residential use amount to ‘rebuilding’ rather than ‘conversion’ and thus was not permitted development. That judgement means that the vast majority of modern farm buildings are excluded for permitted development.
Local authorities, no doubt, would argue that the workload has increased significantly at a time when funding from central government has been cut savagely. All budgets are under scrutiny, including those of planning departments. Many good, experienced planning officers leave public service to earn more as consultants leaving the local authority with fewer, less experienced staff.
I was at a meeting last week in Parliament with George Eustice, Defra Minister, and Lord Bourne, Minister in the Department of Housing, Communities and Local Government. We made the point that gaining planning consent is always cited as the main obstacle to farm diversification. It was pointed out that Government guidance has brought in many of the changes that we were asking for but that it takes time for any change in guidance to be reflected in the attitude of individual planning officers. The problem, of course, is how to make the process simpler, more effective and less bureaucratic without losing the safeguards of good practice.
On the way home, I stopped in at Reading University to hear the annual Edith Mary Gayton Memorial Lecture, this year given by Jeremy Moody, secretary of the CAAV (Central Association of Agricultural Valuers). He gave an inspirational and thought-provoking talk on ‘Management options for agri-businesses to increase the availability of farmland for new entrants to agriculture’. Recognising the sheer scale of the change required, he said that who could bring about such change was even more important than the how.
Some farmers might continue to produce conventional commodities when driving down costs is the key to profitability not least by embracing innovation. Some might diversify their businesses to gain alternative income whilst others might restructure their land use. Jeremy Moody suggested that new entrants were essential to bring fresh thinking and energy. What he described at the weary farmer should think of retiring or, at least, bring in some fresh blood. Of course, many might try all three.
A broad range of policy is needed to facilitate change, including tax incentives and fresh thinking about land tenure. The introduction of farm business tenancies in 1995 has helped, but this needs to be extended to collaboration between farmers, share farming and other land use mechanisms. Coming back to planning, there needs to be more flexibility to allow a new farmhouse to be built to accommodate the succession of generations, a policy that has been implemented in Wales.
Leaving the European Union provides opportunities to create a bright future. Advances in technology, whether in robotics or genetics, will bring great change whether we are within or without the EU, the fourth agricultural revolution I wrote about in January. We need to facilitate that change by encouraging new entrants into farming and providing a dignified exit for those unable to manage the process.